Web 1.0 Washups; IT Budgets; VCs and the SEC

Reporter Nitasha Tiku covers technology, finance, green business, and social entrepreneurship for Inc. magazine and contributes to the staff?s daily links blog. Her work has appeared in New York magazine, The Villager, Chelsea Now, and on nymag.com. She lives in Brooklyn, New York.

Where Are They Now: Web 1.0 Edition.The New York Times style section profiles Pseudo Programs founder Josh Harris. Valleywag describes Harris as "the Silicon Valley O.G. who washed up when the 1.0 tech bubble burst." Harris is also the subject of an upcoming Sundance documentary We Live In Public--hence the profile. Web 1.0-ophiles may remember Harris best for webcamming his entire life for online voyeurs (including bathroom visits, the Times is quick to mention). But he's also responsible for some of the first webcasts through Pseudo. Valleywag pegs him as "maybe the first chronic oversharer," who gave rise to the Twitters, Tumblrs, and Facebooks of the world. So where is the man who once convinced 100 people to live in an underground facility with an altar, see-through shower, and firing range? The man who Jason Calacanis calls "One of the 10 most important people in the history of the Internet"? Living in his friend's LA poolhouse and eeking out a living playing poker at the racetrack. Possibly Calacanis' poolhouse, conjectures Valleywag. Harris is also trying his hand at a new startup, with Calacanis' help. "Basically, it would have a large group of people living in a sort of three-dimensional real-world Facebook, where 'friends' could participate in one another's every move," explains the Times.

The internet, by the numbers. Sure the internet has drastically changed the way we live our lives, but what about its actual economic impact? According to a recent study conducted by two Harvard Business School professors, it's pretty darn big. Some of the statistics to come out of the study show that 3.05 million people's jobs are tied either directly or indirectly to the internet, accounting for about $300 billion in wages. Also, the study shows the direct economic value the internet provides to the rest of the U.S. economy to be an estimated $175 billion. On his blog, Scenarios and Strategy, scenario-planner Lawrence Wilkinson takes a closer look at the study's results and tries to put some meaning to the numbers. As he puts it, "The experience of telecoms suggests that, while there will continue to be growth in (and money to be made in) internet-specific businesses, the larger and faster-growing opportunities, at least in aggregate, lie in what the net enables, in what we can do with the web."

A Facebook exodus? Is Facebook, one of the most successful startups of the past decade, in danger of becoming passe? That's the contention of Virginia Heffernan in this week's New York Times Magazine. Heffernan asked around and found that a number of Facebook users have decided to part ways with the site: "Is Facebook doomed to someday become an online ghost town, run by zombie users who never update their pages and packs of marketers picking at the corpses of social circles they once hoped to exploit?" she asks. "Sad, if so. Though maybe fated, like the demise of a college clique." Fred Wilson looks up the numbers--which show massive traffic and continued growth--and throws cold water on this theory: "Here's the deal, churn is part of online media, particularly social media. People come and go. Some stick around, some don't. These stories about quitters are true of course, but they miss the big picture. More and more people are using these services every day."

How do small businesses spend their IT budget?Spiceworks' annual survey of small and medium-sized businesses is out this week and GigaOm has the breakdown. Of the 1,130 IT professionals surveyed (from companies with less than 500 employees), 39 percent reported cutting IT budgets this year, with an average of 22 percent reduction. More surprisingly 30 percent saw their IT budget increase, with an average of 27 percent. The bulk of the money (37 percent) went to hardware and 24 percent to software. The respondents' purchase plans for the rest of the year? 38 percent will spend on backup and recovery, 46 percent on antivirus and spam prevention, and 30 percent on virtualization software. 56 percent of companies use at least one hosted or cloud service (web hosting being the most popular with 25 percent). "However," says GigaOm, "It doesn't seem like full-scale cloud technologies like Amazon's S3 and EC2 have caught on as quickly outside Silicon Valley."

The argument against forcing VCs to register with the SEC. VC investor Alan Patricof and NYU b-school professor Eric Dinallo have an op-ed in the New York Times stating that VC funds pose no systemic risks and therefore should be exempt from the Obama administration's proposed law to require private capital (like funds that cover derivatives and mortgage-backed securities) to register with the SEC to be monitored. Particularly now, say the authors, VC funds need the freedom to flourish. Dan Primack at peHUB takes issue with one of their claims, namely that VC only deal with privately-purchased equity securities in start-up companies, which are not publicly-traded. Says Primack, "Not only do some of those companies, if successful, ultimately create public securities that VC firms hold, but more and more VC firms are making investments in already public companies."

EMC founder dies. Richard Egan, founder of EMC and former ambassador to Ireland, died Friday in an apparent suicide. The Boston Business Journal says, "His aggressive business style and no-nonsense presentation were legendary at EMC as well as within Massachusetts' technology community, and remain hallmarks among the company's management and senior executive ranks today." Egan was 73.

The underwear index. No need to look to Wall Street any longer for signs of an economic recovery; just look in your top drawer. As the Washington Post reports, underwear sales for men have proven to be a good economic indicator as they are typically stable since they are a necessity, but tough economic times leads men to hold onto the Fruit of the Looms longer between new purchases. Thankfully the MUI, or men's underwear index, does show some signs of an upturn. Research firm Mintel predicts that underwear sales next year will fall by 0.5 percent, a positive sign in that it marks a slower decline than this year's expected drop of 2.3 percent in sales. The Post quotes one D.C.-area resident as not having bought a new pair of underwear in at least eight months.